Strategic human resource management (SHRM) studies how employment relationships can optimize organizational goals. SHRM links HR practices like recruitment, training, and promotions to competitive strategies like innovation, quality, and cost reduction. It uses high-performance practices including extensive training, incentive pay, and employee involvement to improve employee skills, motivation, and retention. SHRM views employees as sources of sustained competitive advantage and systematically aligns HR practices with competitive strategy to increase organizational effectiveness.

1. STRATEGIC HUMAN
RESOURCE MANAGEMENT
By-
Poornima Singh Pawar

2. DISCUSSION
What is meant by the term “Strategic Human
Resource Management” and how has it been
used to study the employment relationship?

3. HUMAN RESOURCE
MANAGEMENT
“… human resource management (alternatively,
‘employee relations’ or ‘labor management’) includes
the firm’s work systems and its models of employment.
It embraces both individual and collective aspects of
people management. It is not restricted to any one
style or ideology. It engages the energies of both line
and specialist managers… and typically entails a blend
of messages for a variety of workforce groups.”
Purcell & Boxall (2003) P. 24

4. HUMAN RESOURCE
MANAGEMENT
“HRM as a subject of study assumes that the interests of
employees and employers will coincide and is preoccupied
with the shared goal of organizational effectiveness that
marginalizes the interests of other stakeholders such as
employees. HRM is also predominantly focused on the
individual and seeks solutions to HR problems within the
firm, with an analytical focus on the motivations and
aspirations of individual employees.”
Bach (2005) P. 4

5. STRATEGY
“The determination of the basic long-term goals and
objectives of an enterprise and the adoption of courses
of action and the allocation of resources necessary for
carrying out these goals.”
Alfred Chandler, Strategy and Structure, (MIT Press, 1962), P. 13

6. STRATEGY
 At the core, its is the debate between best fit and best
practice
 Used for gaining a competitive advantage
 Innovation
 Offer something new; different from competitors
 Quality Enhancement
 Products and services
 Cost Reduction
 Attempt to be the lowest cost provider
 Optimal strategy depends on the wants and nature of
competitors

7. TYPES OF STRATEGY
 Business
 Examines correspondence between each firm’s
competitive strategy and its system of high performance
work practices
 Operations
 An internal approach; connected to the work
organization inside a firm
 Resource View
 Views human resources as sources of sustained
competitive advantage

8. STRATEGIC HRM
 “(S)trategic HRM is about how the
employment relationships for all employees
can be managed in such a way as to
contribute optimally to the organization’s
goal achievement.” Legge (2005) P. 223

9. HR PRACTICES LINKED WITH
COMPETITIVE STRATEGY
 Recruitment
 Training
 Career Path
 Promotions
 Socialization
 Openness

10. HIGH PERFORMANCE
PRACTICES
 Features
 Comprehensive selection/recruitment procedures
 Incentive compensation
 Extensive employee involvement/training
 Expected Results
 Improve knowledge, skills, and abilities of employees
 Increase motivation
 Reduce shirking
 Enhance retention of quality employees (reduce tenure of
non-performers)
Huselid (1995) P. 635

11. HIGH COMMITMENT
PRACTICES
 Unique to the High-Performance Paradigm
 Sophisticated selection and training
 Emphasis on values, human relations skills, and knowledge skills
 Behavior-based appraisal
 Single status policies
 Contingent pay systems
 Traditional Personnel Practices
 Job security
 Above market pay and benefits
 Grievance systems Godard (2004) P. 351

12. CONCLUSION
Model of the Basic Strategic HRM Components
HUMAN CAPITAL POOL:
Knowledge, Skill, Ability
EMPLOYEE RELATIONSHIP BEHAVIORS:
Psychological Contracts, Citizenship, Discretion
Wright, P. Dunford, B. and Snell, S. (2001) Human Resources and the Resource Based View of the Firm, Journal of Management, 27:6
PEOPLE MANAGING PRACTICES:
Staffing, Training, Rewards, Appraisal,
Work Design, Participation, Recognition, Communication

13. CONCLUSION
 Effectiveness can be increased by
systematically melding human resource
practices with the selected competitive
strategy
 The success or failure of a firm is not likely
to turn entirely on its strategic human
resource management practices, but these
practices are likely to be critical